Program Evaluation
Prepared For The Budgetary Responsibility Oversight Committee
Property Forfeitures Under State and Federal Drug Laws

Russell W. Hinton, State Auditor

October 2002

Performance Audit Operations Division 254 Washington St., S.W.

Department of Audits and Accounts

Atlanta, GA 30334-8400

Background
Both state and federal laws allow law enforcement agencies to seize property that is linked to illegal drug sales and possession. Seized property can include practically anything of value (such as money, real estate, cars, weapons, cell phones, scales, etc.). The main recipients of state and federal forfeiture proceeds include state and local law enforcement agencies, district attorney offices, and Multi-Jurisdictional Drug Task Forces (MJDTFs). Agencies that receive forfeited property can elect to destroy it (which is often the case with guns), use it for law enforcement purposes, or sell the property and use the proceeds for law enforcement purposes.
State and federal forfeiture cases are usually handled in civil court separately from the criminal proceedings against the owner of the property. If the criminal case is prosecuted under federal law, the corresponding forfeiture case is usually processed under federal law as well. In deciding if a case should be prosecuted under state or federal law, several factors are considered such as the amount of property and drugs seized, which laws were violated, which laws would result in a stiffer penalty, and if the case is an isolated incident or if it is related to a larger drug network. State and federal forfeiture laws have different restrictions relating to the distribution and use of the proceeds of forfeiture cases. Some of the restrictions on state law enforcement agencies are different than the restrictions on local law enforcement agencies. If there is no compelling reason to prosecute the case under either state or federal law, the decision may be based on the preferences of law enforcement agencies or on whether state or federal forfeiture laws provide for the most favorable distribution of forfeited proceeds. An overview of the state and federal forfeiture process is shown in Exhibit 1 on the next page. Exhibit 2 provides a comparison of state and federal laws related to the distribution and use of forfeited property for both state and local law enforcement agencies.
District attorneys in Georgia's 48 judicial circuits handle state forfeiture proceedings through Superior Court rulings; however, district attorneys can contact the Prosecuting Attorneys' Council (PAC) of Georgia if they need assistance with forfeiture cases. Appendix A shows Georgia's judicial circuits and the circuits that are normally assisted by PAC. The U.S. Department of Justice (DOJ) and the U.S. Department of the Treasury (Treasury) distribute forfeited proceeds under federal forfeiture law.

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Page 1

Property Forfeitures Under State and Federal Drug Laws

Handled under STATE LAW

Exhibit 1 Seized and Forfeited Property Process
(Under State or Federal Law)

Judgment in favor of the state. (Judgment may include some portion of the seized property
being returned to owner.)

Forfeited property distributed based on an Order of Distribution from the Superior Court. (see Exhibit 2 for State Laws relating to the distribution
of forfeited property)

District Attorney files Notice of Seizure or Complaint with the Superior Court (resulting in a judicial forfeiture proceeding).

Judgment in favor of owner.
District Attorney withdraws complaint.
Case settled prior to judicial proceeding.

Seized property is returned to owner.
Generally a portion of the value of the seized property is returned to the owner and a portion is distributed to participating law enforcement agencies based on an Order of Disposition from the Superior Court. (see Exhibit 2 for State Laws relating to the distribution of forfeited property)

SEIZURE of Property

Seizure not handled under federal law and forfeiture proceedings not initiated under state law.

Administratively forfeited by federal
agency.

Handled under
FEDERAL LAW

Real Estate and/or certain property over $500,000 in value.

Owner files claim.
Judicial forfeiture proceeding.

Owner does not file claim
Judgment in favor of the federal government.
Judgment in favor of the owner.
Case settled prior to judicial proceeding.

Source: State law, federal law, and DOJ records

Seized property is returned to owner.
Forfeited property distributed based on Federal Laws. (see Exhibit 2 for Federal Laws relating to the distribution of forfeited property)
Seized property is returned to the owner.
Generally a portion of the value of the seized property is returned to the owner and a portion is distributed to participating law enforcement agencies. (see Exhibit 2 for Federal Laws relating to the distribution of forfeited property).

Page 2

Exhibit 2 State and Federal Forfeiture Laws Impacting State and Local Law Enforcement Agencies

STATE FORFEITURE LAWS

STATE AGENCIES

LOCAL AGENCIES

FEDERAL FORFEITURE LAWS

STATE AGENCIES

LOCAL AGENCIES

State and local law enforcement agencies must report seized property to local district attorneys in order to obtain judicial authorization to keep the
property.

PROVISIONS RELATING TO DISTRIBUTION

Superior Court issues an Order of Disposition (normally prepared by the District Attorneys) describing how property is to be distributed
(normally based on participation).
All costs are paid before proceeds are distributed.
District attorneys may take up to 10% of the distribution for their expenses.

State agency's share limited to 25% of the
distribution.

Annual distributions cannot be more than
1/3 of a local law enforcement agency's
budget.

State and local law enforcement agencies must submit a form to the U.S. Department of Justice or
the U.S. Department of Treasury requesting a share of federal forfeiture proceeds.
U.S. Department of Justice or the U.S. Department of Treasury determines share that each participating state and local agency is to
receive (normally based on participation).
All costs are paid before proceeds are distributed.
Federal agency takes at least 20% of the distribution (remaining 80% goes to participating
federal, state and local law enforcement agencies).

State agency's share not limited.

Annual distribution to local law
enforcement agencies not limited.

PROVISIONS RELATING TO USES OF PROCEEDS

Cash proceeds must go to the General Fund of the State Treasury. (With approval of the Attorney General, property may go directly to a state agency.)
Cash proceeds cannot be used by State law enforcement agencies. (Cash proceeds go to the General Fund of the State Treasury.)

Proceeds must go to local government body
before they can be transferred to a local law enforcement
agency.
Proceeds can be used for any law
enforcement purpose (except cannot be
used to supplant other funds for operations and cannot be used
for salaries or rewards to law enforcement personnel).

Proceeds go directly to state agencies
(proceeds do not have to be remitted to the General Fund of the State Treasury).

Proceeds go directly to local law enforcement
agencies.

State and local agencies can use proceeds for law enforcement purposes such as training, equipment and operations, drug education, law enforcement
and detention facilities, and asset accounting/ tracking. Proceeds cannot be used for payment of existing salaries, non-law enforcement expenses,
extravagant expenditures or for uses contrary to state or local laws.

Source: State and Federal Laws

State Forfeitures Since 1974, state law has allowed law enforcement agencies to seize certain property in connection with drug offenses. State law allows any state or local law enforcement agency to

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seize "moneys, negotiable instruments, securities, or other things of value which are found in close proximity to any controlled substance or marijuana." State law also provides for seizures of the proceeds of drug activity and seizures of property which has been used (or is intended to be used) to facilitate drug activity. The primary law enforcement agency that handles the case is required to report the seized property to the local district attorney. The amount received by each agency involved with the case is usually based on the degree of participation by the agency in the law enforcement effort and is specified in a Superior Court order of disposition. State law allows the district attorney to keep 10% of the forfeited proceeds. State agencies that participate in a forfeiture case may receive up to 25% of the forfeited proceeds and are required to remit any cash proceeds to the General Fund of the State Treasury. The remaining funds are distributed to participating local law enforcement agencies. Local law enforcement agencies can use state forfeiture proceeds for allowable law enforcement purposes.
In fiscal year 2001, the Prosecuting Attorneys' Council (PAC) reported that it assisted 17 of the state's 48 judicial circuits with 527 drug forfeiture cases, which involved cash and property valued at $4.0 million. Since no state agency collects statewide information concerning the total number or dollar amount of property forfeitures under state law, we surveyed district attorney offices to determine the amount of property forfeited under state law and how the property was distributed. The period covered by the survey was from December 1, 2000 to November 30, 2001. Forty-five (94%) of the 48 circuits responded to the survey. The circuits reported 2,831 state forfeiture cases, $7.2 million in forfeited cash, and 4,448 pieces of forfeited property valued at $888,732. It should be noted that these totals are underreported since 24 of the 45 circuits that responded to the survey did not provide estimates of the value of the property forfeited, and eight circuits only reported the value of some of the property forfeited. Proceeds from forfeited property were distributed to at least 229 agencies - 205 local law enforcement agencies, 23 MJDTFs, and one state agency (two guns to the Department of Natural Resources). The total amount of property and cash related to state forfeiture cases that was distributed to state and local agencies is summarized in Appendix B on page 16 and a more detailed summary of state forfeiture proceeds distributed to local law enforcement agencies by judicial circuit can be found in Appendix C on page 17.
Federal Forfeitures Since 1984, any state or local law enforcement agency that directly participates in an investigation or prosecution that results in a federal forfeiture may request an equitable share of the net proceeds of the forfeiture. Joint investigations occur when federal agencies work with state or local law enforcement agencies to enforce federal criminal laws. A state or local law enforcement agency may also request that a federal agency "adopt" a forfeiture case even when federal agencies are not involved if there is a violation of federal law and the seized property is within certain thresholds.1 The federal government normally keeps at least 20% of the value of the seized property and the remaining participating agencies are eligible to share up to 80% of the net proceeds based on the degree of participation by the agency. Both state and local law enforcement agencies can use federal forfeiture proceeds for allowable law enforcement purposes.

1 In adoptive cases, property generally is not eligible for federal forfeiture proceedings unless the equity in the property exceeds the following levels: vehicles $2,500; vessels and aircraft $5,000; real property $10,000; and all other property, excluding firearms $1,000.

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U.S. Drug Enforcement Administration (DEA) officials believe that Georgia has a high amount of drug-related forfeitures because drug money is moved through Atlanta to Mexico. According to a U.S. Census report, law enforcement agencies in Georgia received the sixth highest amount of federal forfeitures from the DOJ in federal fiscal year 2001.
According to the U.S. Department of Justice, Georgia received $11.4 million in cash and 38 pieces of property valued at $225,686 in federal fiscal year 2001 from drug-related federal forfeitures. Information was not available on the number of cases processed. These proceeds were distributed to 125 agencies--107 local law enforcement agencies, 11 MJDTFs, and seven state agencies. The total amount of property and cash related to federal forfeiture cases that was distributed to state and local agencies is summarized in Appendix B on page 16 and a more detailed summary of federal forfeiture proceeds distributed to local law enforcement agencies by judicial circuit can be found in Appendix C on page 17. While the U.S. Department of the Treasury does not know how much of the forfeitures they processed were related to drugs, it reported that it distributed $446,179 in forfeited proceeds to 11 local law enforcement agencies and to three state agencies in federal fiscal year 2001.
Evaluation Scope and Methodology
This evaluation was conducted in compliance with O.C.G.A. 45-12-178 enacted in 1993. The evaluation was performed to answer certain questions the Budgetary Responsibility Oversight Committee had regarding the topic of "Drug Enforcement and Prevention" and was conducted in accordance with Generally Accepted Government Auditing Standards for Performance Audits. The scope of the evaluation focused on the issues identified by BROC that are listed below:
To what extent are assets forfeited under state and federal drug laws tracked?
Comment on what happens to funds or property transferred to cooperating law
enforcement agencies under O.C.G.A. 16-13-49(u)(4)(B) (property forfeitures under state drug laws) and 16-13-48.1 (property forfeitures under federal drug laws).
During the course of the evaluation, the evaluation team visited three state agencies, 36 local law enforcement agencies, and district attorney offices at four judicial circuits. In addition to these site visits, the evaluation team surveyed district attorneys for the state's 48 judicial circuits regarding state forfeitures. The evaluation team also interviewed staff at PAC, the DOJ, the Treasury, and the Marshals Service.
A copy of the report was provided to appropriate personnel at the Georgia Bureau of Investigation (GBI), Georgia State Patrol (GSP), Department of Public Safety (DPS), Department of Corrections (DOC), Prosecuting Attorneys' Council (PAC) and the Attorney General's Office. Personnel from each agency were invited to provide a written response to the report, and the agencies were also invited to indicate any areas in which they planned to take corrective action. Pertinent responses from the agencies are reflected in the report as appropriate.

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Issue: To what extent are assets forfeited under state and federal drug laws tracked?
Finding No. 1 State forfeiture cases are not tracked. The General Assembly should consider revising the law to provide for at least minimal tracking and monitoring of state forfeiture cases. Based on systems in use in other states, it should be possible to develop a low cost system that would improve controls over state forfeiture cases.
Records on state forfeiture cases are primarily kept at the local level where the seizure took place. Some district attorneys in judicial circuits track forfeiture cases; however, based on responses to our survey, it appeared that 26 of the 45 circuits that responded to our survey did not track forfeiture cases. The Criminal Justice Coordinating Council collects quarterly reports from Multi-Jurisdictional Drug Task Forces (MJDTFs), which summarize the amount of property forfeited to MJDTFs; but these reports do not distinguish between state and federal forfeiture cases. The Prosecuting Attorneys' Council of Georgia (PAC) maintains limited information on the forfeiture cases that it works on; however, PAC only provided assistance in 17 of the 48 judicial circuits and does not know if the cases they worked on represent all of the circuits' forfeiture cases.
The absence of any tracking or monitoring of forfeiture cases processed under state law has resulted in problems not being identified, which precludes any corrective action taking place. For example, no one was aware of problems with state agencies avoiding prosecuting cases under state forfeiture laws (see Finding No. 1 on page 8) or poor local law enforcement agency controls over state forfeiture cases (see Finding No. 3 on page 13) until they were identified by this evaluation.
A model forfeiture act developed by the Council of State Governments in 1985 recommended that any property forfeited to the state be transferred to the state attorney general and that the attorney general should be responsible for distributing the property. The act also recommended that an asset forfeiture fund be created in the state's treasury. Other tracking and monitoring systems for state forfeiture cases are also possible as evidenced by systems already used in other states. For example, state forfeiture tracking/monitoring systems used by the five states identified in a U.S. Census report as having the most federal forfeiture proceeds (Georgia was ranked sixth) are described in Exhibit 3 on the next page.
States with smaller forfeiture collections have also implemented forfeiture tracking/monitoring systems. For example, in 1999 Arkansas (which ranked 34th on the previously mentioned Census report) implemented an Asset Seizure Tracking System (ASTS), which is administered by the state's Drug Director. The system was started with $20,000; however, state agencies provide staff and space to keep the program running. Law enforcement agencies are required to report any seizures to ASTS within five days, and 30 to 40 cases are audited each year.

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Exhibit 3 Forfeiture Tracking/Monitoring Systems Used in Other States
California statute requires the Attorney General to annually report on all drug forfeitures and seizures. The report includes the number of forfeiture actions initiated during the year, a summary of each forfeiture case, the value of the assets forfeited, and the recipients of the proceeds. Florida's Department of Law Enforcement (DLE) is responsible for compiling an annual report on drug forfeiture proceeds for the Legislature. Law enforcement agencies report all cash proceeds from forfeitures to DLE semi-annually. In Illinois, the State's Attorney and the State Police process all forfeited property in the State. Every local, county, and state law enforcement agency in the state must notify the State's Attorney of any seizures within 52 days. The State's Attorney is responsible for handling all state forfeiture cases. The Illinois State Police are responsible for safeguarding, disposing, and maintaining an inventory of seized property. Illinois law stipulates that 65% of forfeited proceeds are given to the investigating agency or agencies, 12.5% to the State's Attorney, 12.5% to the State Attorney's Appellate Prosecutor's Office, and 10% to the State Police. New York's Office of Public Safety created an Asset Forfeiture Reporting Program that produces an annual report on the disposal of forfeited property under state law. The report is given to the Governor and the Legislature and summarizes the amount of property forfeited to law enforcement agencies and district attorneys. Texas statute requires all entities that receive state forfeitures to have an audit conducted annually to account for the seizure, forfeiture, receipt and expenditure of state forfeiture proceeds. Copies of the audits are required to be delivered to the state's attorney general. Source: Evaluation team surveys of other states.
The General Assembly should consider revising the law to provide for at least minimal tracking and monitoring of state forfeiture cases. Based on systems in use in other states, it should be possible to develop a low cost system that would improve controls over state forfeiture cases. A state agency such as the Attorney General or PAC might be made responsible for compiling and reviewing reports submitted by local law enforcement agencies. These reports might be similar to the federal reports that local law enforcement agencies are already required to prepare. Another possibility would be to require that compliance with state provisions for forfeited property be reviewed as part of the independent annual financial audits of local government entities as is done in Texas. Any costs associated with any work added to the financial audits might be reimbursed with forfeiture funds.
The Attorney General Office's response to the evaluation indicated that while it did not take issue with the ideal of centralized reporting of forfeiture funds, it thought that another entity such as the Criminal Justice Coordinating Council or the GBI might be better equipped to handle the kind of tracking envisioned in the report. The Attorney General's Office also indicated that it had no objection to including compliance reviews of forfeited property in independent financial audits of local governments.
The Georgia State Patrol indicated in its response to the evaluation that while some tracking of forfeitures is provided through the federal El Paso Intelligence Center (EPIC) system, a better job of tracking/monitoring forfeitures needs to be done. GSP reported that it has started implementing an in-house system to track all GSP forfeiture cases.
Finding No. 2 Distributions from federal forfeiture cases are tracked by the U.S. Department of Justice, the U.S. Department of the Treasury, and the U.S. Marshals Service.

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DOJ and the Treasury produce annual reports that show the state and local law enforcement agencies that received proceeds from federal forfeiture cases and the amounts received by the agencies. The U.S. Marshals Service sells property that is seized under federal provisions and distributes the proceeds to participating agencies. The U.S. Marshals Service also monitors and safeguards this property before it is sold or distributed.
Any state or local law enforcement agency that received forfeited cash, property, or proceeds as a result of a federal forfeiture case is required to submit a Federal Equitable Sharing Agreement (Sharing Agreement) and a Federal Annual Certification Report (Annual Report). The Sharing Agreement is required to be completed every three years, and the Annual Report must be completed each year (within 60 days after the close of the agency's fiscal year). Both documents are sent to the DOJ, the Treasury, and to the U.S. Attorney in the district in which the law enforcement agency is located. These documents have to be signed by the head of the law enforcement agency and a designated official of an organization who has budgetary oversight over the agency.
In the Sharing Agreement, the agency agrees that the forfeited proceeds will be used in accordance with federal statutes and guidelines and that the proceeds will be accounted for separately and not commingled with other funds. The Sharing Agreement also stipulates that the agency will create a separate revenue account or accounting code for the forfeited funds. The agency must list in the Annual Report the amount of forfeited funds received, the amount of forfeited funds spent, how they were spent, and the beginning and ending forfeiture account balance. Agencies that receive over $300,000 in forfeited proceeds are required to have an audit conducted in addition to random periodic audits conducted by DOJ and the Treasury. If these documents are not submitted or if the forfeited proceeds are misused (i.e. used for non-law enforcement purposes or used to supplant existing resources), the agency could be denied participation in future federal forfeiture cases.

Issue:

Comment on what happens to funds or property transferred to cooperating law enforcement agencies under O.C.G.A. 16-13-49(u)(4)(B) (property forfeitures under state drug laws) and 16-13-48.1 (property forfeitures under federal drug laws).

Finding No. 1 State law enforcement agencies have not processed any forfeiture cases involving cash under state law. Consequently, the State has not received any revenue from state forfeiture cases. State agencies processed forfeiture cases under federal law or elected to turn over their state forfeiture cases to local law enforcement agencies (in some instances in return for donated equipment). There is no incentive for state agencies to participate in state forfeiture cases, because state agencies must remit the proceeds of these cases to the General Fund of the State Treasury.
A survey of the judicial circuits in the state did not identify any cash proceeds being distributed to a state agency as a result of a state forfeiture case during the 12-month period from December 1, 2000 to November 30, 2001. In addition, while state law mandates that funds remitted to state agencies as a result of a state forfeiture case "be paid into the general fund of the state treasury", the Accounting Director of the Office of Treasury and Fiscal Services reported that

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his office did not have any records of forfeited proceeds being remitted to the state over the last five years.
The evaluation team visited the three state agencies that received 97% (approximately $1.2 million) of the federal forfeiture proceeds distributed to state agencies in federal fiscal year 2001 to verify that the agencies did not process any state forfeiture cases and to identify the reasons why there were no state forfeiture cases. Comments by staff at the agencies regarding decisions for not processing any forfeiture cases under state laws are summarized below.
Georgia Bureau of Investigation (GBI) ($591,068 in federal forfeitures) While GBI management personnel thought that most cases with GBI participation were probably processed under federal provisions, they could not explain why the GBI had no state forfeiture receipts during the period of our review. The GBI does not have any written policies or procedures on how state forfeiture cases should be handled; however, management personnel thought that the district attorneys processing state forfeiture cases should be aware of GBI participation in forfeiture cases from the information in case files and that the district attorney would automatically include the GBI in any distributions. No summary information on state forfeiture cases with GBI participation was available, and a review of all GBI case files in the local offices would be necessary to identify state forfeiture cases with GBI participation.
GBI personnel in the field reported that they elect not to make a claim for a share of the distributions of the state forfeiture proceeds distributed to the 12 MJDTFs that GBI personnel supervise. They also reported that GBI forfeiture cases originating out of their regional offices use federal forfeiture laws whenever possible. GBI agents at four of six "dual purpose" regional offices (which are intended to concentrate on drug enforcement efforts) reported that they received equipment donated from local law enforcement agencies and also reported that when the GBI cannot process a case through federal law, the case is "turned over" to a local law enforcement agency to be processed under state forfeiture laws. In these instances, the forfeited proceeds are in effect given to the local law enforcement agency and in return the agency receiving the proceeds may donate equipment to the GBI.
While the GBI had no records that showed cases that resulted in donations, from February 2001 to October 2001, the GBI received donated camera equipment valued at $16,705 from two sheriff's offices and six donated vehicles valued at $152,067 from one Sheriff's Office (Jeff Davis County). One of the three district attorneys that processed the state forfeiture cases related to these donations reported that he was aware of GBI involvement in these cases but was not sure of the level of GBI involvement. One district attorney reported that he was aware of GBI involvement in the case but reported that the GBI was not included in the distribution because the local sheriff indicated that he would handle GBI's share through a donation. The remaining district attorney reported that he was also aware of GBI involvement in several cases but did not include the GBI in the distribution because he thought that the GBI was not the primary agency involved with the cases. A GBI agent at one of the regions specifically noted that the six vehicles were donated as a result of a case involving more than $1 million in property that was "turned over" to a local law enforcement agency.

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Georgia State Patrol (GSP) ($453,248 in federal forfeitures) Forfeiture cases initiated by the Atlanta High Intensity Drug Trafficking Area (HIDTA) task force are processed under federal law since nine federal agencies participate in the task force. For other cases that result in the seizure of drugs and property, the appropriate local law enforcement agency is contacted based on Drug Interdiction Guidelines that have been developed by the Georgia Board of Public Safety. These Guidelines provide that GSP will waive its rights to a share of any state forfeiture case proceeds in return for a donation of equipment equivalent to one half of the total value of any proceeds. The Guidelines appear to be in conflict with state law which limits a state agency's share of the forfeiture proceeds from state forfeiture cases to 25% of the total forfeiture proceeds and requires that a state agency's share of such proceeds be remitted to the general fund of the state treasury.
GSP Legal Services personnel initially stated in a written response to questions posed by the evaluation team that the agency's "waiver in exchange for donations is intended to encourage GSP to use State forfeitures without loosing their interest to the State treasury." However in their written response to the evaluation, GSP reported that the "primary intent of the Guidelines is to promote cooperation between state and local law enforcement agencies and encourage them to work together in all law enforcement efforts." (emphasis added)
Information was not available on the number of GSP state forfeiture cases turned over to local law enforcement agencies; therefore, there is no way to tell if GSP is getting its proper share of state forfeiture case proceeds. However, from January 1, 2001 to May 30, 2002, GSP received $62,896.63 in donations (including $43,151.10 in cash). Three cases were referenced in connection with $39,551.10 of these cash donations. Information was not available to tie the remaining donations to specific state forfeiture cases.
In its response to the evaluation, GSP indicated that it does not closely track forfeitures turned over to local law enforcement agencies because it thinks that the amount of assets going through state forfeiture cases is relatively small and it also noted that "cooperative enforcement is not really about the money GSP's priority is fighting crime."
Department of Corrections (DOC) ($139,658 in federal forfeitures) DOC's main source of federal forfeitures is through its participation in a federal DEA led task force. DOC also maintains four fugitive squads, and federal agencies participate in two of the squads. DOC does not have any written policies or procedures on how state forfeiture cases should be handled. DOC reported that all property forfeitures occurring during the period of our review were related to federal task force activities and the agency did not feel that written policies or procedures on how state forfeiture cases should be handled were necessary. In its response to the evaluation, DOC indicated that policies would be generated if they became involved in situations that might lead to state forfeitures.
The evaluation team also identified that the Governor's Task Force (GTF) for Drug Suppression's 2001 Action Report reported that it seized $464,000 in property that was forfeited under state law. The proceeds went to two Multi-Jurisdictional Drug Task Forces (MJDTFs) that did the investigative work on the cases. GTF does not have any written policies or procedures on how state forfeiture cases should be handled. GTF personnel indicated that the Task Force chose

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not to request a share in any of the proceeds of these cases, because as state agencies they could not keep any proceeds. GTF personnel also indicated that in some cases, GTF would receive donated equipment from the agencies receiving forfeited proceeds; however, they reported that no donations resulted from the cases reported in the 2001 Action Report.
State agencies that are eligible for state forfeiture proceeds should develop clear policies and procedures on when state forfeiture cases should be pursued and how the cases should be processed. Agencies that wish to waive their rights to state forfeitures in return for donations should request an opinion from the Attorney General's Office to determine if this practice is allowable under state law. State agencies should also monitor any state forfeiture cases in which they participated to ensure that they receive their proper share of any distributions.

Finding No. 2 Local law enforcement agencies process their forfeiture cases under both state and federal law. When deciding between the use of federal or state forfeiture laws, agencies tend to prosecute cases involving the seizure of large amounts of money, real estate, or no drugs under federal laws. Conversely, forfeiture cases that involve smaller amounts of property are typically prosecuted under state forfeiture laws. The decision criteria has some flexibility and agencies will sometimes prosecute a forfeiture case based on their preferences for the use of state or federal laws or under the set of laws that they feel will result in the most favorable distribution of proceeds.

If property is seized through a joint investigation involving any federal law enforcement agencies, the case is normally prosecuted under federal law. If property is seized by a local law enforcement agency working without federal involvement, the agency must decide if it wants to prosecute the forfeiture case under federal law by having a federal law enforcement agency "adopt" the case or prosecute the case under state law. Forfeiture cases are usually handled under the same jurisdiction as the criminal case; however, law enforcement personnel interviewed by the evaluation team noted that the following factors influenced decisions to process forfeiture cases under federal law.

Property is seized but no drugs are seized. Prior to recent changes in federal law there was a perception that it might be easier to pursue a case under federal law if no drugs were seized.

Large amount of drugs and cash seized. In these instances, federal laws are normally used to process the forfeiture since the seizure is probably related to an operation that operates in multiple states. Law enforcement personnel also indicated that they felt the federal government had more resources at its disposal to conduct the additional investigations needed to fully prosecute such cases.

Real estate is seized. U.S. prosecutors are more experienced at disposing of real property than local district attorneys. As a result, these cases are usually prosecuted under federal law.

Amount seized meets federal thresholds. Federal prosecutors have thresholds for the amount of property that must be seized in order to proceed with a federal forfeiture case

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(see footnote 1 on page 4). For example, seized vehicles must have a value of at least $2,500 for federal prosecutors to take the case.
While the previous factors provide a basis for many decisions regarding prosecuting forfeiture cases under state or federal laws, the choice may still be influenced by the preferences of the law enforcement agencies. For example, the district attorney for one judicial circuit reported that they have had problems with law enforcement agencies splitting up forfeitures within one case to maximize their receipts. Agencies would, for example, take seized cash through federal law but take a seized car through state law in order to get the vehicle sooner and to avoid certain federal limitations2 on the use of forfeited property. Twenty-one (62%) of the 34 local law enforcement agencies we visited stated that they had no preference for which forfeiture laws they used, nine preferred state forfeiture laws, and four preferred federal forfeiture laws. Some of the reasons given for preferring one set of forfeiture laws over the other are summarized in Exhibit 4 below.
Exhibit 4 Local Law Enforcement Agency Preferences for
Use of Federal or State Forfeiture Laws
Preference for Prosecuting Forfeiture Cases Under Federal Laws One agency believed that the evidence requirement for federal forfeiture cases was more lenient than for state forfeiture cases and that punishments for drug offenses were harsher under federal law. One agency thought that the federal forfeiture cases were easier to negotiate. One agency thought that the local district attorney's office was too lenient and lost too many cases.
Preference for Proecuting Forfeiture Cases Under State Laws Two agencies thought that there was too much "red tape" associated with federal forfeitures cases. One agency thought that state forfeiture cases were more user-friendly. One agency did not think that state forfeiture cases took as long as federal cases. One agency thought that it could get more money forfeited to them through state law and thought that it could make more money from selling seized cars themselves.
Source: Interviews of local law enforcement agency personnel.
There is some control to prevent local law enforcement agencies from making excessive use of federal forfeiture cases since law enforcement agencies cannot elect to use federal forfeiture laws for cases without any federal participation unless a federal law enforcement agency agrees to "adopt" the case. Local law enforcement agencies in Georgia do not appear to be unduly favoring the use of federal (or state) forfeiture laws. While the total amount of forfeiture case proceeds identified in our survey is underreported, available information (see Appendix C) indicated that at least 41% of forfeiture proceeds in Georgia were processed under state law. In comparison, three of the five states identified in a U.S. Census report as having the most federal forfeiture proceeds (Georgia was ranked sixth) processed from 18% to 46% of their total forfeiture proceeds under state laws. (Information on the proportion of state forfeitures was not readily available for the other two states.)

2 An agency can request to keep forfeited property under federal law. To keep the property, the agency must use the property for at least two years (only for law enforcement purposes) before selling it, reimburse the federal government for any costs associated with the property, and pay for the federal government's share of the property.

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Finding No. 3 The evaluation team visited 26 local law enforcement agencies in four judicial circuits that received proceeds from state forfeiture cases and found problems with local agencies not complying with state forfeiture laws, misusing forfeited proceeds, and commingling forfeited proceeds with other fund sources.
The evaluation team visited local law enforcement agencies in four judicial circuits. Overall, the evaluation team visited 26 (11%) of the 229 agencies that were identified as receiving state forfeiture proceeds. The visits identified the following problems with compliance with state forfeiture laws and with controls over forfeited funds.
Problems with adherence to State Law regarding state forfeitures Five (19%) of the 26 agencies received proceeds from state forfeiture cases directly (without the funds passing through their local governing board as required by state law).
Twenty-two (85%) of the 26 agencies did not submit an annual report on state forfeiture cases to their local governing board as required by state law.
While two agencies did not spend their proceeds from forfeiture cases prosecuted under state law, three (13%) of the remaining 24 agencies spent some portion of their forfeited proceeds on items that appeared unrelated to law enforcement. These agencies used forfeited proceeds to buy flowers for wreck victims, Christmas decorations and gift certificates, to fund a golf tournament and department cookout, and to buy school supplies for local students. Additionally, two agencies reported that their forfeited proceeds were deposited into their general fund, and as a result, it could not be determined how the funds were spent.
Problems with Internal Controls Nine (35%) of the 26 agencies held seized money in their offices until the state forfeiture cases were finished. Seized money should be placed in an interest bearing account where it can be monitored by a third party. Such accounts help ensure that the money will not be used or "loaned" until it is legally forfeited.
The local governing board of one of the law enforcement agencies visited by the evaluation team was under investigation by the GBI for misuse of state forfeiture funds. The local governing board was reportedly "raiding" the local law enforcement agency's forfeiture fund to move the funds into its general fund where the money would be spent on projects and services not related to law enforcement.
Improved oversight and monitoring of local law enforcement agencies' state forfeiture cases is needed. Improvements needed in tracking and monitoring systems for state forfeiture cases are discussed in greater detail in Finding No. 1 on page 6.

Finding No. 4 Evaluation team visits to three state and 10 local law enforcement agencies, which received proceeds from federal forfeiture cases, found that their expenditures were allowable under federal forfeiture laws. However, the team also found that the GBI and GSP maintain

Property Forfeitures Under State and Federal Drug Laws

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relatively large reserves ($1.8 million and $4.7 million) of federal forfeiture proceeds. While these reserves are permissible under state budget provisions, these funds should be used within a reasonable period of time and not held as reserves indefinitely.

The evaluation team visited the three state agencies that received 97% of the federal forfeiture proceeds distributed to state agencies in federal fiscal year 2001 (Georgia Bureau of Investigation (GBI), Georgia State Patrol (GSP), and Department of Corrections (DOC)). The evaluation team also visited 10 (8%) of the 118 local law enforcement agencies and MJDTFs that received federal forfeiture proceeds in federal fiscal year 2001. The evaluation team found that two of the local law enforcement agencies that were visited had not spent any of their federal forfeiture proceeds. The evaluation team identified the state and local agencies' expenditures of federal forfeiture proceeds to be permissible under federal law. The agencies used their federal forfeiture proceeds to pay for law enforcement items such as overtime, supplies, training, bomb disposal equipment, computers, vehicle repairs, clothing, and equipment. It should be noted that subsequent to our review, the Attorney General's Office issued an Official Opinion on September 24, 2002 providing that "Under Georgia law federal forfeiture funds may not be used to pay the salaries, including overtime pay and benefits, to law enforcement officers."

State agencies are allowed to carryover as a reserve any unspent federal forfeiture proceeds from year-to-year. As can be seen in Exhibit 5, GBI and GSP had reserves in excess of a million dollars at the end of fiscal year 2001. GSP reported that it had originally planned to use its forfeited funds reserve to build a facility but decided to use proceeds from a bond issue instead. The GBI reported that it anticipates reducing its reserve by approximately $1.5 million in fiscal year 2002.

Exhibit 5

Federal Forfeiture Proceeds

As of June 30, 2001

Agency

Forfeiture Fund

Amount of

Balance1

Proceeds Spent2

GSP

$4,700,845

$464,751

GBI

$1,858,376

$336,348

DOC

$ 133,655

$ 84,474

Sources: 1 Department of Audits fiscal year 2001 management reports 2 OPB fiscal year 2001 budget amendments

While permissible under state budget provisions, excess reserves of federal forfeited proceeds should be used within a reasonable period of time and not held indefinitely as a potential source of funding outside of normal legislative appropriations. If not specifically needed for another purpose, the funds can always be used for allowable expenses to supplement the agency's normal expenditures.

In its response to the evaluation, the Department of Public Safety (DPS) indicated that the agency's intent regarding its reserve of federal forfeiture proceeds was to "efficiently and effectively manage this fund." The agency felt that they should "...maintain funds when possible for emergency situations and needs that occur outside, and that would require funding not provided for in the agency budget...." The agency also felt that "it would not be a good management strategy to attempt to maintain a zero base budget for these proceeds in this case."

Property Forfeitures Under State and Federal Drug Laws

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Appendix A Judicial Circuits and PAC Regional Offices in Georgia

26

14 3

21 29

11

30

38

8

7

36

31

43

13

24

1

48

18

4

42

2

37

12

22

16

23

32

46

PAC Regional Offices
1 Smyrna 2 Albany 3 Macon 4 Savannah
17 Circuits where asset forfeitures were assisted by PAC's Drug Prosecutions Division
45 Circuits that handle their own asset forfeitures
6

3

27

19

28

10

19

34

25

41

15

33

2

44

17

35

39

1

40

20 4 5
9 47

Source: PAC Records

Circuit Name
1 Alapaha 2 Alcovy 3 Appalachian 4 Atlanta 5 Atlantic 6 Augusta 7 Bell-Forsyth 8 Blue Ridge 9 Brunswick 10 Chattahoochee 11 Cherokee 12 Clayton 13 Cobb 14 Conasauga 15 Cordele 16 Coweta 17 Dougherty
18 Douglas
19 Dublin 20 Eastern 21 Enotah 22 Flint 23 Griffin 24 Gwinnett 25 Houston 26 Lookout Mountain 27 Macon 28 Middle 29 Mountain 30 Northeastern 31 Northern 32 Ocmulgee 33 Oconee
34 Ogeechee 35 Pataula 36 Piedmont 37 Rockdale 38 Rome 39 South Georgia 40 Southern 41 Southwestern 42 Stone Mountain 43 Tallapoosa 44 Tifton 45 Toombs 46 Towaliga 47 Waycross 48 Western

Property Forfeitures Under State and Federal Drug Laws

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Property Forfeitures Under State and Federal Drug Laws

Appendix B Forfeited Property Distributions To State and Local Law Enforcement Agencies

Cases

STATE AGENCIES

Georgia Bureau of Investigation

0

Georgia State Patrol

0

Department of Corrections

0

State Board of Pardons and Paroles 0

Department of Transportation

0

Georgia National Guard

0

Secretary of State

0

Department of Natural Resources 1

Total State Agencies

1

State Forfeitures 12/1/00 to 11/30/01

Cash

Property Value Pieces

$ 0 0 0 0 0 0 0 0 0

$ 0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

22

0

2

TOTAL

Federal Forfeitures 10/1/2000 to 9/30/2001

Cash 3

Property Value Pieces

Total

TOTAL State and Federal
Forfeitures

$ 0 0 0 0 0 0 0 0 0

$575,215 453,248 130,758 17,346 15,193 4,550 1,764 0
$1,198,074

$15,8534 0
$ 8,9005 0 0 0 0 0
$24,753

1

$591,068

0

453,248

2

139,658

0

17,346

0

15,193

0

4,550

0

1,764

0

0

3 $1,222,827

$591,068 453,248 139,658 17,346 15,193 4,550 1,764 0
$1,222,827

TOTAL JUDICIAL CIRCUITS1

2,830 $7,216,687 $888,732 4,448 $8,105,419 $10,201,183 $200,933

35 $10,402,116

$18,507,535

GRAND TOTAL

2,831 $7,216,687 $888,732 4,450 $8,105,419 $11,399,257 $225,686

1 Distributions made to non-state agencies. See detail on distribution to these agencies by Judicial Circuit on next page. 2 A .38 pistol and a .243 rifle. The value of the guns is unknown. 3 Includes seized cash and proceeds from the sale of property. 4 1998 Lincoln Navigator. 5 1998 Lexus GS-300 and a 1989 Trailmobile Refrigerated Trailer.
Source: U.S. Department of Justice Equitable Sharing Summary Report and Evaluation Team Survey

38 $11,624,943

$19,730,362

Page 16

Appendix C

Forfeited Property Distributions by Judicial Circuita

Circuit

#

Stateb Property

TOTAL

Federalc

Total

1 Alapaha

Cases Cash

Value Pieces

13 $ 3,524.39 $

d

13 $ 3,524.39

Amount

State & Federal

$

0 $ 3,524.39

2 Alcovy 3 Appalachian 4 Atlanta 5 Atlantic 6 Augusta f 7 Bell-Forsyth 8 Blue Ridge f 9 Brunswick f 10 Chattahoochee 11 Cherokee f

Did not respond to the survey

8 22,047.00

d

2 22,047.00

332 509,877.68

d

601 509,877.68

39 387,584.51 10,824.50

e 398,409.01

125 156,167.49 21 32,890.89

1,800.00 175 157,967.49

38,760.00

e

68,650.89

66 180,369.15 86,200.00 205 266,569.15

60 1,023,628.26 114 387,364.76

2,960.00
g

27 1,026,588.26 e 387,364.76

45 46,866.70 10,190.00 25 57,056.70

125,304.28 0
1,491,775.49 383,312.45 294,897.82 98,034.71 1,834.70 9,442.70 5,458.05 227,751.45

125,304.28 22,047.00
2,001,653.17 781,721.46 452,865.31 166,685.60 268,403.85
1,036,030.96 392,822.81 284,808.15

12 Clayton 13 Cobb 14 Conasauga f 15 Cordele f 16 Coweta f 17 Dougherty 18 Douglas 19 Dublin 20 Eastern

20 37,048.48 269 525,981.45

11,096.00

3 48,144.48

d

144 525,981.45

56 113,528.00 59,483.00 111 173,011.00

24 47,261.76

2,000.00 59 49,261.76

85 283,017.11 130,019.01 147 413,036.12

46 120,495.00 98,872.00

e 219,367.00

166 417,645.37

d

512 417,645.37

18

8,024.88 10,900.00

e

18,924.88

52 58,678.80

d

30 58,678.80

1,840,439.90 296,602.84 120,107.01 733,589.36 948,721.76 45,485.77 46,956.94 3,690.34 45,784.14

1,888,584.38 822,584.29 293,118.01 782,851.12
1,361,757.88 264,852.77 464,602.31 22,615.22 104,462.94

21 Enotah 22 Flint

Did not respond to the survey

51 125,648.07

d

279 125,648.07

58,115.32 289,277.00

58,115.32 414,925.07

23 Griffin 24 Gwinnett 25 Houston 26 Lookout Mountain 27 Macon 28 Middle 29 Mountain 30 Northeastern f 31 Northern 32 Ocmulgee 33 Oconee 34 Ogeechee

51 199,825.04 54 392,613.08 66 56,030.94 36 110,354.31 62 206,060.24 51 48,110.72 17 16,055.00 54 118,381.61 60 93,392.00 39 85,094.93
7 14,058.00 97 58,491.44

55,315.00 166 255,140.04

d

15 392,613.08

d

154 56,030.94

d

142 110,354.31

d

29 206,060.24

d

81 48,110.72

d

49 16,055.00

4,875.00 42 123,256.61

69,250.00

e 162,642.00

59,043.50

e 144,138.43

5,000.00

e

19,058.00

d

319 58,491.44

940,716.96 60,682.10 32,440.06 3,253.91
102,047.33 19,807.83 31,656.51 48,893.20 20,008.97
122,680.18 12,541.96 7,574.81

1,195,857.00 453,295.18 88,471.00 113,608.22 308,107.57 67,918.55 47,711.51 172,149.81 182,650.97 266,818.61 31,599.96 66,066.25

35 Pataula 36 Piedmont 37 Rockdale 38 Rome 39 South Georgia 40 Southern 41 Southwestern 42 Stone Mountain 43 Tallapoosa 44 Tifton 45 Toombs 46 Towaliga 47 Waycross 48 Western

Did not respond to the survey

55 47,609.69

d

37 47,609.69

4

4,198.00

5,000.00

e

9,198.00

44 112,827.00

d

3 112,827.00

29 49,125.00 40,069.00

e

89,194.00

110 109,590.09

d

208 109,590.09

54 64,499.43

d

129 64,499.43

133 550,197.39 174,551.00

e

724,748.39

50 98,382.23

d

216 98,382.23

25 40,766.00 15,524.00

e

56,290.00

11

4,934.00

d

37

4,934.00

45 43,768.16

d

158 43,768.16

43 105,676.76

d

271 105,676.76

28 98,996.58

d

59 98,996.58

0 0 38,570.14 66,496.86 3,178 347,302.97 100,955.85 1,262,706.48 29,534.64 13,521.23 22,168.68 16,786.52 5,414.88 26,594.64

0 47,609.69 47,768.14 179,323.86 92,371.72 456,893.06 165,455.28 1,987,454.87 127,916.87 69,811.23 27,102.68 60,554.68 111,091.64 125,591.22

Total

2,830 $7,216,687.39 $ 888,732.01 4,448 $8,105,419.40 $10,402,116.46 $18,507,535.86

a Does not include distributions to state agencies. See Appendix B for distributions to state agencies. b Based on Survey conducted by the Evaluation Team for time period of December 1, 2000 to November 30, 2001. c Based on U.S. Department of Justice Equitable Sharing Distribution Summary Report for federal fiscal year 2001. Amount

includes cash, proceeds from the sale of property, and the value of property transferred to agencies. d No property values given. e Cannot determine. f Property values incomplete. g Cash figure also includes property.

Property Forfeitures Under State and Federal Drug Laws

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For additional information, please contact Paul E. Bernard, Director, Performance Audit Operations Division, at (404) 657-5220.

Property Forfeitures Under State and Federal Drug Laws

Page 18